On Chicago’s Morning Answer, guest host Chris Krok welcomed James E. Perry, founder and Chief Investment Officer of Perry International Capital Partners LLC, to discuss the latest jobs numbers and the broader economic outlook. Perry offered a cautiously optimistic assessment of the labor market while warning that persistent inflation and excess stimulus continue to threaten long-term financial stability.
The June jobs report showed a gain of 147,000 new positions, a figure that beat expectations from most economists and reinforced a pattern of steady post-pandemic labor market growth. Perry acknowledged the positive headline but advised listeners to treat the numbers with some skepticism due to the limitations of government data collection. With an official labor force of 160 million and likely millions more unofficially employed, Perry said the real picture is always murkier than a single report might suggest.
Despite that caveat, Perry was clear: the U.S. labor market remains historically strong. He pointed to wage growth, particularly among non-college graduates, which is running at approximately 4.3%—a rate not seen in two decades. Consumer spending, which drives about 75% of the country’s GDP, is currently growing at around 5%, further indicating that the economy remains resilient.
However, Perry’s optimism stopped short when the conversation turned to inflation and interest rates. Federal Reserve Chairman Jerome Powell has stated that inflation remains too high, and he hasn’t ruled out holding or even raising interest rates. Perry agreed with Powell’s assessment that inflation is a lingering concern, but he cautioned against interpreting Powell’s statements as purely economic in nature. He described Powell as a capable but political figure, citing his decision to delay interest rate hikes during the COVID-era inflation surge until after he was reappointed.
According to Perry, the root issue is overstimulation. Since the pandemic, aggregate inflation has raised prices across the board by at least 25%, placing significant pressure on small businesses and households. Despite falling Treasury yields and improving market indicators, he argued the economy doesn’t need further stimulus. The current environment, he said, is already awash in liquidity, driven in part by excessive government spending and artificially low interest rates.
Perry also pointed out that certain sectors—including real estate and leveraged financial markets—are pushing for cheaper money not because it would benefit the broader economy, but because it serves their bottom lines. He warned against accommodating these interests, stating bluntly that “you can’t spend money created out of thin air without causing inflation.”
In Perry’s view, the public frustration over inflation is already reshaping the political landscape, and unless fiscal restraint is restored, those frustrations will only grow. He predicted the Federal Reserve would hold rates steady for the rest of the year and resist calls—political or otherwise—for rate cuts.
The takeaway from Perry’s appearance was clear: while the labor market is robust and the consumer sector remains active, policymakers should focus on controlling inflation and resisting the temptation to overstimulate an already overheated economy.